The impact of Covid-19 on the CO2 Offset Scheme

The Coronavirus is having a massive impact, not only on health and wellbeing, but also on politics, societies and economies. Aviation is one of the industries that has been hard hit by the pandemic as many airlines worldwide are forced to ground their aircraft, resulting in cancelled flights and staff being laid off. The virus is driving air traffic downward, thereby potentially making it more challenging for airlines to achieve their commitment of carbon neutral growth from 2020.

In 2016, in order to tackle the impact of aviation on the global climate crisis, the UN’s International Civil Aviation Organisation (ICAO) adopted the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Under this scheme, airlines commit to carbon neutral growth from 2020, capping the net CO2 emissions of flights between participating states from 2021-2035. The implementation of CORSIA involves using airline CO2 emissions data of 2019 and 2020, to establish a baseline in which future offsetting would be based.

“2020 is supposed to be, alongside 2019, the baseline for the CORSIA programme,” says the executive director of the cross-industry Air Transport Action Group, Michael Gill. “An average of the two years was agreed in order to smooth any potential downturn in traffic in either year, but a situation as grave as the one we are currently facing was never contemplated.”

With the Covid-19, airlines are concerned that if air traffic declines dramatically in 2020 and rebounds sharply in 2021, they would have to offset more carbon emissions than anticipated. Aviation is a main contributor to climate change. In 2018, nearly 900 million tonnes of CO2 were emitted by domestic and international flights, accounting for 2.4% of worldwide CO2 emissions.

On the other hand, the pandemic might also put the finger on the airline industry’s concerns about climate change, meaning that people will consider very carefully about travelling in the future. Indeed, ICAO may be urged to change the fundamentals of CORSIA to ease the financial misery for airlines.

Nevertheless, it might be too soon to conclude the impact of Covid-19 on the CORSIA baseline as we need to look at how the situation evolves over time. There is no doubt that this year has been a totally abnormal situation, but, in the meantime, we still have an industry to recover and a world to reconnect.

Regardless of the situation, we strongly believe that sustainability is an important aspect of an airline’s business strategy, given that carbon offsetting projects are usually costly and time-consuming, and require a clear roadmap. Since 1993, Brookfield Aviation has provided support to airlines in building strategic targets and more recently with regards to environment concerns, which include a number of sustainability measures and initiatives. For more information about Brookfield’s environmental consultancy service, please email Quan Nguyen